SMEs may soon receive a helping hand from the government as a consultation takes place on how legislation can be changed to tackle late payment.
The minister for small businesses will be looking at tackling a culture of late payment which puts SMEs at a significant disadvantage. A move to amend legislation could help SMEs avoid getting themselves into debt and in some cases ending up insolvent due to cash flow issues.
Views have been sought on expanding the powers of representative bodies so that they will be in a position to challenge large companies’ contract terms and practices. A paper on the subject released in February also suggested how what constitutes “grossly unfair” in UK law.
The consultation published in October outlines the government’s proposals. The proposals include how to make it easier for SMEs to take disputes over late payment to court. Disputes over contractual terms have often been a grey area for SMEs and it has been hard to prove what should and shouldn’t be regarded as grossly unfair in legal terms.
The consultation at least offers a glimmer of hope to smaller businesses who often find themselves at the mercy of larger companies. However matter may be complicated with responsibility for amending the law split between England Northern Ireland and Wales on one side and Scotland on the other.